Asia Wealth Securities (AWS) released an analysis for the trading session on February 14, 2020, indicating the essential events in the stock market as follows:
1) The US stock market dropped but gold and crude oil price rose.
2) Investment overview resumed to be worried about the outbreak of the COVID-19 virus, especially the issues that the US began to doubt the credibility of the information and the method for evaluating new infected people by the Chinese authorities. However, information from the World Health Organization (WHO) states that the reported numbers are “an afterfact of reporting” and most are classified as retrospective cases. It did not show a significant change in the direction of the disease.
3) Crude oil price reflects negative factors from the economic slowdown and the effects of the outbreak of COVID-19 virus. Previously, OPEC and EIA lowered the 2020 crude oil demand estimate to 0.6-0.7 million barrels per day. Also, the market began to interest in OPEC meeting (5-6 Mar) about whether there will be a reduction in proportion capacity or not.
4) The draft Budget Act of 2020 passed the resolution approved by members of the House of Representatives which expected to be sent to the Senate for consideration within 17 Feb 2020 before being presented to His Majesty to sign the name and announced within Mar 2020 as scheduled. From this point, we look to be positive for stocks in accelerating disbursement of government budget in 2020 and government stimulus measures according to the theme investment.
1) Accelerate disbursement of government budget in 2020. AWS chooses CK (TP Bt22.00), SEAFCO (TP Bt7.30), CPALL (TP Bt94.00), and KKP (TP Bt80.00).
2) Government stimulus measure, AOT (TP Bt84.00), CPALL (TP Bt94.00), and HMPRO (TP Bt19.00).
3) Global trade has eased and Thai baht depreciates. AWS chooses HANA (TP Bt39.00), TU (TP Bt18.40), and CPF (TP Bt33.00).
4) Interest rates cut. AWS chooses ORI (TP Bt10.00), SPALI (TP Bt20.00), MTC (TP Bt75.00), KKP (TP Bt80.00), and TISCO (TP Bt112.00)
5) High dividend yield and defensive stock, we choose KKP (TP Bt80.00) and GPSC (TP Bt97.00).
AWS expects the SET to be within the range of 1,517 – 1,539 points (Support: 1,529 1,524 and 1,517 points / Resistance: 1,535 1,539 and 1,546 points).